One thing is certain about next week's Irish budget: it will be ugly. In order to reduce the country's debt (heading to anywhere up to 100% of national income), Brian Lenihan is set to announce further spending cuts and painful tax rises. This is the huge bill the Irish will have to pay over many years – and in large part it has been racked up by a reckless and foolish banking sector. Which prompts the question: why should Dublin not default on its debt? For fear of unpopularity? Recent opinion polls show that the majority of Irish voters would support a default. Principled objection? No, because the government has suggested it may force a renegotiation of some of the debt owed by the now-stricken banks. And if the government does not extend that action to the rest of the IOUs it has taken on to bail out the banks, it will end up paying something like one pound of every five it takes in in taxes on its debt. That is unfair and – going by bond-market analysts, who expect a default sooner or later – unsustainable. A default does not mean walking away from all the debt for ever, but Dublin declaring it cannot keep paying back all of these loans at face value. Then it should renegotiate how much those loans are really worth and set a new schedule of repayments. This will cost Irish ministers some pride but, going by IMF research on other countries that have done just this, not an awful lot financially over the longer term. The alternative is yet another eurozone bailout that bears a close resemblance to the Treaty of Versailles.

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